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Third Issuance -- Premium Assistance for Eligible Former Federal Employees

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This is the third issuance concerning implementation of premium assistance for eligible former Federal employees receiving temporary continuation of coverage under Public Law 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA). The purpose is to provide additional guidance to agencies on determining individuals eligible for premium assistance.

Nature of Action Codes (NOAC)

Agency personnel are encouraged to use judgment in determining individuals eligible for premium assistance for temporary continuation of coverage under the Federal Employees Health Benefits (FEHB) Program. Separations are actions that remove employees from the rolls of their agencies, for example, deaths, resignations, terminations, removals, and retirements. A nature of action code (NOAC) beginning with a “3” is a separation. The NOAC list shown below should be reviewed for purposes of determining separated individuals who may be eligible for premium assistance based on involuntary separation under the American Recovery and Reinvestment Act of 2009 (ARRA). NOTE: Individuals separated for gross misconduct are not eligible for temporary extension of coverage, under CFR 890.1102.

* If FEHB is terminated and individual is eligible for temporary continuation of coverage.

Direct Premium Remittance System

Agencies have inquired how to implement premium assistance through the direct premium remittance system and their respective payroll providers. We have been holding discussions with payroll providers, including the United States Department of Agriculture’s (USDA) National Finance Center (NFC), which currently administers temporary continuation of coverage for almost all Federal agencies. NFC has developed a preliminary implementation plan to assist agencies. To expedite administration of the premium assistance, NFC has requested the following information be forwarded as soon as possible, but no later than April 30, 2009:

Name of Agency/Organization
Name of Primary Point of Contact
Telephone Number
Email Address
Mailing Address

NFC is in the processing of changing the premium billing amounts for those individuals currently on temporary continuation of coverage and who are paying the full TCC premium rate (102% of premium). NFC expects to either offset future premium billings or to refund the premium overpayments to those individuals who meet the requirements for premium assistance. NFC will work closely with agencies to identify these individuals so that their TCC premiums can be adjusted.

Please note: The premium assistance provisions apply only to premiums for coverage periods beginning on or after February 17, 2009. If the employee was eligible for the assistance but paid in full for periods of TCC coverage beginning on or after February 17, 2009, he or she should be made aware that NFC will provide for a credit against future payments (or a refund in certain circumstances).

Former employees who contact the agencies should be advised that these premium adjustments will be made as soon as possible and no later than July 2009.

Expedited Review of Premium Assistance Denials

The Department of Health and Human Services (HHS) is in the process of establishing an expedited appeals process for employees who have been denied premium assistance and has informed us it is the designated agency under the ARRA for review of such appeals.

HHS will handle appeals for Federal, State, and local governmental employees, as well as appeals related to group health insurance coverage provided pursuant to state continuation coverage laws.

HHS is required to make a determination regarding a former employee’s appeal within 15 business days after receiving a completed application for review. HHS is in the process of establishing the appeals process system and expects it to be implemented by May 1, 2009. We will provide additional information as it becomes available. Below is a link to the government website on premium assistance denials and appeals. http://www.dol.gov/ebsa/subsidydenialreview.html